During the 1960s and 1970s an enormous amount of research was conducted to better understand children's social and intellectual development, and hundreds of educational programs for children and parents were initiated in hopes of improving conditions surrounding many of America's young children. By the middle 1970s, however, it became apparent that competence in the young child held different meanings for different professionals. Although attempts to arrive at a single definition have been only partially successful, references to competency in young children have become widespread in recent psychological and educational literature. Thus, it is the purpose of this paper to discuss the nature and development of competent behavior in young children as it appears in the literature and to suggest some approaches to the measurement and evaluation of competence in children. The first section of the paper stresses the importance of competent development in young children prior to formal schooling, the second deals with the question, What is a competent young child? and the third discusses the research on parenting and peer relations, focusing on the importance of these two factors in fostering the development of competence in young children. Finally, the fourth section suggests ways teachers can evaluate competence in young children. (MP)